The Billing/Accounts Receivable/Cash Receipts Process:
This chapter explores in detail the B/AR/CR process. We will examine managerial decision making perspectives concerning this process; technologies available to support this process; and various models of this process (DFD's, ERD's, and system flowcharts). Finally the chapter will explore The Control Matrix for this process.
Billing/Accounts Receivable/Cash Receipts Process Activities:
Bill Customers
Manage Customer Accounts
Secure Payments from customers for goods or services
Billing/Accounts Receivable/Cash Receipts Information Flows:
1.
2
Horizontal Information Flows (10), please describe them:
Shipping department to AR department: Shipping department informs the accounts receivable department of shipment
AR department to customer: AR sends invoice to customer
AR department to GL department: AR informs general ledger process that invoice was sent to the customer
Customer to credit department: Customer by defaulting on amount duem informs credit department of nonpayment
Credit department to AR department: Credit department recommends write-off of the receivable and informs AR department
Credit department to sales order department: Credit department by changing credit limits informs sales order department to terminate credit sales to customer
AR department to GL department: AR informs general ledger process of write-off
Customer to Cashier: Customer makes payment on account
Cashier to AR department: Cashier informs AR department of payment
Cashier to GL department: Cashier informs GL process of payment
Vertical Information Flows, explain:
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Technologies Supporting OE/S Process:
CRM - Customer Self Service (link to anything already in the wiki, e-mail if you need help doing this)
Digital Image Processing
Cash Receipts Management
Narratives of the OE/S Process:
Write narratives for each of the models provided in chapter 11 starting with:
B/AR/CR Process Context Diagram:
B/AR/CR Process Level-0 Diagram
B/AR/CR Process Level-1 (process 1) Diagram:
B/AR/CR Process Level-1 (process 2) Diagram:
B/AR/CR Process Level-1 (process 3) Diagram:
B/AR/CR System Flowchart (Billing Function):
B/AR/CR System Flowchart (Cash Receipt Function):
Describe the data structures from the ERD model provided in chater 11:
Types of Billing Systems
Post -Billing - Invoices are prepared after goods have been shipped and the sales order notification has been matched to shipping's billing notification.
Pre-Billing - Invoices are prepared immediately on acceptance of a customer order (after inventory and credit checks have been accomplished. - occurs in situations where there is little or no delay between receipt of customer order and its shipment. example - catalog sales operations like L.L. Bean
Cash Receipt Management
Float, when applied to cash receipts, is the time between the customer tendering payment and the availability of good funds. Good funds are funds on deposit and available for use.
The following procedures are designed to reduce or eliminate the float associated with cash receipts: 1.Magnetic Ink Character Recognition (MICR) - High-speed electronic equipment is able to read the MICR code and sort checks at speeds approaching 100,000 checks per hour 2. Credit Cards - The retailer submits the charges to the credit card company for reimbursement. The credit card company bills the consumer. 3. Debit Card- Is a form of payment authorizing the collector to transfer funds electronically from the payer's to the collector's balance.
Logical Data Descriptions
Accounts receivable master data - a repository of all unpaid invocies issued by an organization and awaiting final disposition.
Two types of accounts receivbale systems exist:
1. balance only system
2. open item system
Balance-only system - A/R records consist of a customer's current balance due, past-due, and the finance charges and payment related to the account.
Open-item sustem - is more complex the a balance-only system and is used when customers typically makes payments for specific invoices when those invoices are due. A/r master data is organized such that each record consists of individual open invoices, against which all paymetns/adjustments are applied.
Sales event data - a filed comprised of one or more invoice recordcs, analogous to a sales journal in a manual book keeping system
Accounts receivbale adjustments data - an event data store, normally keyed by date, created as sales returns, bad debt write offs, estimated doubtful accounts, or similar adjustments are processed.
Cash receipts data - an event data store that contains the details of each payment received. Each record normally would show the date the payment is recorded, customer id, invoice no., and gross invoice amount, cash discount, net invoice amount, check amount, and check number
The Billing/Accounts Receivable/Cash Receipts Process:
This chapter explores in detail the B/AR/CR process. We will examine managerial decision making perspectives concerning this process; technologies available to support this process; and various models of this process (DFD's, ERD's, and system flowcharts). Finally the chapter will explore The Control Matrix for this process.Billing/Accounts Receivable/Cash Receipts Process Activities:
Billing/Accounts Receivable/Cash Receipts Information Flows:
1.2
Horizontal Information Flows (10), please describe them:
Vertical Information Flows, explain:
----
Technologies Supporting OE/S Process:
Narratives of the OE/S Process:
B/AR/CR Process Context Diagram:
B/AR/CR Process Level-0 Diagram
B/AR/CR Process Level-1 (process 1) Diagram:
B/AR/CR Process Level-1 (process 2) Diagram:
B/AR/CR Process Level-1 (process 3) Diagram:
B/AR/CR System Flowchart (Billing Function):
B/AR/CR System Flowchart (Cash Receipt Function):
Types of Billing Systems
Cash Receipt Management
Float, when applied to cash receipts, is the time between the customer tendering payment and the availability of good funds. Good funds are funds on deposit and available for use.The following procedures are designed to reduce or eliminate the float associated with cash receipts:
1. Magnetic Ink Character Recognition (MICR) - High-speed electronic equipment is able to read the MICR code and sort checks at speeds approaching 100,000 checks per hour
2. Credit Cards - The retailer submits the charges to the credit card company for reimbursement. The credit card company bills the consumer.
3. Debit Card- Is a form of payment authorizing the collector to transfer funds electronically from the payer's to the collector's balance.
Logical Data Descriptions
Accounts receivable master data - a repository of all unpaid invocies issued by an organization and awaiting final disposition.
Two types of accounts receivbale systems exist:
1. balance only system
2. open item system
Balance-only system - A/R records consist of a customer's current balance due, past-due, and the finance charges and payment related to the account.
Open-item sustem - is more complex the a balance-only system and is used when customers typically makes payments for specific invoices when those invoices are due. A/r master data is organized such that each record consists of individual open invoices, against which all paymetns/adjustments are applied.
Sales event data - a filed comprised of one or more invoice recordcs, analogous to a sales journal in a manual book keeping system
Accounts receivbale adjustments data - an event data store, normally keyed by date, created as sales returns, bad debt write offs, estimated doubtful accounts, or similar adjustments are processed.
Cash receipts data - an event data store that contains the details of each payment received. Each record normally would show the date the payment is recorded, customer id, invoice no., and gross invoice amount, cash discount, net invoice amount, check amount, and check number